On October 23, 2025, the IRS issued IR-2025-107 and Fact Sheet 2025-08 answering FAQs on the Form 1099-K threshold under the One, Big, Beautiful Bill (OBBB). The OBBB retroactively reinstated the reporting threshold in effect before the American Rescue Plan Act of 2021 (ARPA): third-party settlement organizations (TPSOs) — payment apps, marketplaces, and payment card networks — are not required to file Form 1099-K unless gross reportable payment transactions to a payee exceed $20,000 and the number of transactions exceeds 200 in the calendar year.
What Changed
- ARPA $600 rule is gone. ARPA had lowered the TPSO threshold to $600 aggregate, with no transaction count, starting with 2022 — but the IRS delayed enforcement with transitional relief (phased thresholds for 2023–2024). OBBB restores the pre-ARPA $20,000 + 200 transactions threshold retroactively.
- Payment cards unchanged. Payment-card transactions (credit/debit) were always reportable without a de-minimis threshold; OBBB does not change that.
- Backup withholding adjusted. On December 8, 2026, Treasury and IRS proposed regulations reflecting OBBB changes to backup-withholding thresholds for third-party payments — a conforming update to the $20,000 regime.
What Does Not Change
The underlying income tax obligation does not depend on whether you receive a 1099-K. A seller who receives $8,000 in marketplace sales without a 1099-K still has $8,000 of taxable business income if profit exceeds expenses. The threshold governs information reporting by the TPSO, not whether income is taxable.
Record-keeping remains your responsibility: gross receipts, returns, shipping, and fees that net to the 1099-K gross amount must be reconciled to bank deposits. A seller who nets $19,000 in bank deposits but grosses $21,000 in transactions may be near the threshold but must report net profit regardless.
What Sellers and Platforms Should Do
- Sellers: Do not use lack of a 1099-K as proof of non-taxable income. Track gross sales by platform and reconcile to 1099-Ks when issued.
- Platforms (TPSOs): Update reporting logic to the $20,000 + 200-transaction test for 2025 and later calendar years, and retain documentation for prior-year transitional filings.
- Bookkeeping: Post platform gross, fees, refunds, and net payout separately (
Income:Sales:Marketplace:Gross,Expenses:Fees:Marketplace,Assets:Receivable:Marketplace). The 1099-K gross should tie to the gross posting, not to net cash.
Simplify Your Financial Management
The $600 scare generated years of confusion; the reversion to $20,000 restores the pre-ARPA norm but does not remove the need to track every dollar. Beancount.io keeps gross, fees, and net by platform in version-controlled plain text — so the 1099-K you receive (or don't) ties to the ledger, not to guesswork. Get started for free and make reporting thresholds a reconciliation, not a tax strategy.